If we don’t fight for renters and public housing at every step, the housing crisis will only get worse.
That’s why the Greens put our rent freeze bill on the table today for debate in Parliament.
This is an opportunity for Labor to actually help renters, by supporting our bill to make unlimited rent increases illegal.
Victorian Labor’s housing policy will make the housing crisis worse and the Greens won’t ignore renters and destroy public housing when we need it most.
Parliamentary debate speech on 1 November 2023
Around one third of Victorians are renters, and a growing number of them are doing it tough
Unlimited rent hikes and rents that are rising faster than people’s wages are forcing people into record levels of housing stress, homelessness and poverty.
Successive Victorian and federal governments have unashamedly turned housing into a commodity, while simultaneously abandoning public housing. Housing, widely acknowledged as a fundamental human right, has been repackaged as an investment with special treatment given to property developers and investors who are motivated by profit.
And while this has benefited some, it has led to the worst rental crisis we’ve seen in decades for millions of Australians.
In fact, Australia now has more dwellings per adult than at any other time in our history, and yet affordability is the lowest it has ever been.
The Greens believe that to protect those renters from the enduring stress and uncertainty of unlimited rent increases, we urgently need rent controls, and are calling for a two-year rent freeze, followed by an ongoing cap on rents.
This is not a radical idea. Many places around the world have rent controls that coexist with a healthy housing market. Combined with strong tenant protections and not-for-profit housing construction, the housing market can in fact operate in-line with the public interest.
- Scotland froze rents for 12 months in 2022 and now has an ongoing cap of 3%.
- Germany has a nation-wide cap based on size, location and quality of the property.
- Certain properties in New York have a permanent freeze on rent increases.
- There is a 2% cap in “Rent Pressure Zones” in Ireland.
- In China, urban areas have a 5% cap.
- Denmark introduced a new 4% cap after an inflation-linked cap saw rents rise too fast.
- And here in Australia, the ACT links rent caps to inflation. – the sky didn’t fall in, investors continue to enter the market, and even the ACT Real Estate Institute has said that rent caps are fine.
But this Labor government refuses to acknowledge the evidence available to us, and instead has developed a housing policy that fails to disrupt the fundamental driver of the housing crisis – the financialisation of housing as a primary asset. Their policy fails to recognise the urgent need to shift the balance of power between landlords, real estate agents and tenants.
The Greens’ Rent Freeze and Caps Bill aims to do just this, by providing greater predictability and stability for people who rent.
Just like the Emergency Measures Act, this Bill responds to an unprecedented public emergency – the current rental and housing crisis. The amendments contained in the Bill are absolutely necessary to counteract the significant economic and social impacts we are seeing from this housing crisis.
Everywhere we turn in our communities we are hearing it and seeing it: the growing number of those who are homeless, people and families falling deeper into poverty, the increased number of people seeking food relief.
We can do something about it – and we must.
The right to housing is more than simply a right to shelter. The International Covenant on Economic, Social and Cultural Rights clearly states that it is a right to have somewhere to live that is adequate. Whether housing is adequate depends on a range of factors, including affordability and security.
How can we think that rent controls are asking for too much, when all it would do is help people have somewhere adequate to live?
We understand that many people are struggling with the cost of living, not just renters. And that’s why there are other initiatives we are pushing for at the state and federal level that would bring down inflation, help mortgages, first home buyers, and those who depend on rental income.
However, the Greens are especially focussed on ensuring that the increasing cohort of people who are at risk of homelessness are protected from the rising cost of living, to make sure that everyone has their basic needs met – these people are largely renters.
Beyond the risk of homelessness, research shows us that housing affordability is a key factor in a person’s health and wellbeing. When a significant proportion of income is absorbed by higher rents, there is less capacity for money to be spent on food (let alone healthy food) and healthcare.
Housing insecurity is a uniquely stressful situation – something I saw increasingly frequently while working as a GP. People would come in for mental health care plans to help with their anxiety that was being driven by housing insecurity due to rising rents. What they needed was stable housing, not a psychologist.
I have also heard from regional Victorians in my electorate who are seriously impacted by the rising costs of their rental.
Many regional areas were experiencing rapid population growth and rising rents pre-pandemic, but the pandemic caused a dramatic rise in rents, reaching historic highs in 2021.
While the exodus from the city to regional Victoria has slowed, rents continue to rise at above average rates in regional areas. In Warrnambool for example, rental costs have risen by 36.4 per cent over the past five years.
Some will argue that if a person can’t afford a rent rise, they have the option of moving to a cheaper rental property. This is problematic for several reasons. Firstly, the costs of moving can be significant and create financial stress – especially for those on lower incomes who don’t have savings to fall back on, as well as the inconvenience and stress associated with moving.
Secondly, there needs to actually be an affordable rental available to move into. Regional Victoria has some of the tightest rental markets in the country. The Surf Coast shire has a current vacancy rate of 0.45%, and at times during the past few years has had a vacancy rate of zero. Warrnambool has a vacancy rate of 0.53%. Loddon Shire has a vacancy rate of 0.02%.
Those who argue that capping rents will just worsen the availability of rentals as people won’t have as much incentive to move fail to recognise that most people don’t actually want to have to move regularly. And in any case, a substantial rent increase in an environment where there is limited rental availability means that they can’t just move to a cheaper rental in the neighbourhood – because they simply don’t exist.
In regional areas, rent rises are forcing people to move to a completely different town to find housing – dislocating people from their communities where they may have work, school, carers, family and friends.
It’s heartbreaking. It’s not how we build thriving communities and keep people connected to the areas they love and the people they care about.
The argument against capping rents on the basis of inefficient allocation of rentals also assumes that housing is currently optimally allocated – with everyone living in housing that is the right size and location to meet their needs, and that prices help to drive this allocation.
However the type and location of property someone rents is largely a function of their ability to pay and what is actually available, not their need. Importantly, it fails to put a value on stability and security of housing – something that is worth a lot for people, and something rent controls can provide.
Rent controls have widespread community support – different forms and names have been used to argue for their use, including a ‘fairness test’, rent ‘stabilisation’ measures, and rent caps. But the core concept is the same – that it is reasonable to place a limit on how much rents can rise by.
This rental crisis is solvable, and we have the tools at our disposal right now to help better protect renters and those most at risk of homelessness.
We can and we must act now.
